The Role of AI in Simplifying Data Compliance Amid Growing Regulations

Enterprises must rethink their data and document management strategies to navigate the growing regulatory challenges that come with the digital age. Regulations like the EU's General Data Protection Regulation (GDPR), Saudi Arabia's Personal Data Protection Law (PDPL), and the EU AI Act highlight the significant compliance hurdles businesses face.

As data volumes and AI usage increase, and with new regulations on the horizon, particularly in sustainability, it's essential for technology leaders to prioritize these concerns.

Compliance Costs and Risks

These challenges are driving up operational costs and risks for businesses. According to the Cato Institute, U.S. firms spend between 1.3% and 3.3% of their total wage bill on compliance. Research by Drata reveals that companies dedicate around 4,300 hours annually to maintaining compliance.

Non-compliance can result in hefty fines, with $10.5 billion in penalties imposed globally in 2023 alone. This underscores the need for strong systems and processes to mitigate risks and ensure compliance.

Heather Herbst, research director at IDC, highlights how compliance affects not just company stakeholders but also employees, potentially altering the company's direction and impacting many lives.

First Steps

Improving data and document management is an ideal starting point, as 94% of annual compliance costs stem from labor-intensive processes in this area. Addressing these workflows can offer quick, significant improvements.

Businesses typically face three key challenges in data management:

1. Data Volume: The global data pool is expected to grow from 64.2 zettabytes in 2020 to 181 zettabytes by 2025, making it difficult for companies to manage and access this vast data for reporting purposes.

2. Dark Data: Many companies struggle with "dark data"—unused or forgotten data stored across various systems. Robert Gerbrandt, Global Head of Information Governance Advisory at Iron Mountain, points out that at least 20% of a company’s data is redundant or outdated but may still contain sensitive information, posing a compliance risk.

3. Data Classification: Businesses need better data visibility to identify document types, such as confidential information or HR files. This is especially challenging for organizations with large volumes of physical records.

Improved data visibility allows businesses to implement a defensible data management strategy. Gerbrandt emphasizes the need to classify and manage data effectively, noting that around 75,000 global data retention rules must be considered. Managing these processes can be a major factor in the high cost of compliance.

AI's Role in Enhancing Data Compliance

AI is now offering new solutions to these challenges. Gerbrandt explains that AI tools can analyze and interact with data more efficiently than ever before. For example, Iron Mountain's InSight Data Experience Platform (DXP) uses AI to manage physical and digital records, automate document processing, and flag potential compliance issues.

InSight DXP is particularly effective in addressing the challenges of managing dark data. It leverages AI to classify documents using metadata and apply the correct retention policies, ensuring proper compliance management.

Reducing Risk and Cost

InSight DXP helps businesses lower risk and avoid penalties by enforcing best practices in information governance. The platform automatically applies data retention and privacy policies, providing businesses with clear visibility into their compliance obligations. Paired with Iron Mountain's Policy Center solution, InSight DXP enables companies to safely dispose of redundant data, lowering storage costs and ensuring adherence to privacy regulations.

According to independent analysis by Forrester, InSight DXP improves document retrieval efficiency by 40%, enhances document understanding by 55%, and cuts compliance time by 25%. Forrester estimates that a typical organization could see benefits of $5.29 million over three years compared to costs of $1.78 million, yielding a return on investment (ROI) of 196%.